Today Transparency International Hungary (TI) published the results of two of their researches in order to call attention to the challenges the Public Procurement institutional system faces and to the importance of the rules distorting fair competition, thus emphasizing the relevancy of a wide social agreement on the new Public Procurement Act.

The anti-corruption organization analyzed the Council’s actions between 2006 and 2009. „After the initial seclusion, the Council replied to our requests to provide data in a punctual and highly detailed way” – said Ádám Földes, executive director of TI. However, the research draws the attention to numerous problems, which show that in several aspects the Council’s activity lacks the guarantee of transparency and accountability, and there is also an indefinite sphere of authority. The main reason behind the incompleteness of the Council’s task is that the Council interpreted its lawful obligations quite tightly and they did not act in a proactive way in terms of advancing the development of the regulatory framework and the application of it. Nevertheless, the institutional system is not solely responsible for the corrupting mechanisms of the system, due to the fact that behind the problems there are more complex state administrative issues. „The most important task during the rethinking of the institution is to ensure the independence of the forum of remedy proceeding from the government, to support the processes of the regulatory framework’s standardization, to review the control system, to provide services – in accordance with both the market requirements and the ones helping the application of the regulatory framework -, and to speed up the introduction of the electronic public procurement. Examining the tasks separately, we have to decide which institutional structure helps them the most efficiently and for that one we have to create the proper powers and ensure the necessary capacity” – said Péter Tausz, leader of the research.

The research examined several guarantee institutions, in which the organization analyzed 24 contracting authors’ public procurements of 2009. In numerous cases, the contracting authors did not keep the obligations of public release, and in some cases systematic abuses could be established. According to the research, the examined contracting authors spend approximately 10 percent of their budget through procurements under the public procurement threshold on average. These procurements – which are quite significant sums on the national economy scale – are realized under a totally unregulated procedure, and it can mean serious corruption risk. „To this we should answer with ordering compliable public regulations and creating stricter control system instead of lowering the threshold and overregulating the procedure” – Péter Tausz added.

TI in cooperation with the Foundation for Modern Public Procurement have collected those provisions from the law currently in force which influence competition disadvantageously, thus threaten the effective usage of public money. „The key factor of public procurement procedure is the perfectness of competition” – said Dr. Katalin Morvayné Vígh, Member of the Foundation’s Advisory Board. The competition price is developed by fair competition for the market, and this price is lower than the one available without competition. Fair competition ensures to choose the most beneficial tender among all. As a result, on the score of the new Public Procurement Act the essential requirement is to force contracting authors to create competition and guide them to rational procurement behavior. Beyond collecting regulations which are capable of distorting or influencing the market, the two organizations also made suggestions how to eliminate these ones.

At the press conference, in addition to the above points, the representatives of the Club of Purchasing Managers in Hungary called attention to the fact that the new regulation has to be drafted on the basis of modern procurement methods. Strategic way of thinking, appropriate organization, responsible management of resources, up-to-date expertise, application of modern procurement methods and utilities, and a supporting regulatory environment can contribute to reach a hundred billion saving on the national economy scale, according to procurement experts.

All that could be heard at the press conference confirmed that the new Public Procurement Act should answer several challenges and had to reconcile dissimilar interests, therefore a wide social agreement on the new regulation is crucial.